TMI Blog1991 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... he following question has been stated for our opinion in pursuance of an order of the Supreme Court: "Whether the amounts spent by the assessee in purchasing goods for the purpose of resale is expenditure within the meaning of section 40A(3) of the Income-tax Act, 1961 ?" A Bench of this court has held in U. P. Hardware Store v. CIT [1976] 104 ITR 664 that the word "expenditure" used in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, argued that, having regard to the language of sub-section (3) of section 40A, its application must be confined only to deductions claimed under sections 30 to 43A. For a proper appreciation of this submission, it would be appropriate to set out sub-section (3) in so far as it is relevant for our purpose : "40A(3). Where the assessee incurs any expenditure in respect of which payment is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sub-section applies to any expenditure which is claimed by way of deduction and deductions are dealt with in sections 30 to 43A. The amount spent for purchasing goods for the purpose of resale is not claimed as deduction under any of the provisions contained in sections 30 to 43A and, therefore, he says, that the rule contained in sub-section (3) is not applicable to such purchase amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft is an assurance of its, genuineness. It obviates an inquiry into doubtful payment. The provision is intended to introduce openness in business transactions. Having regard to this underlying object, we see no reason to restrict the meaning of the expression "expenditure" to deductions provided by sections 28 to 43A alone. The emphasis is upon the word "expenditure" and not upon the word "deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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